And May has already come and gone! This was really a banner month for us. One of those months that illustrated how much freedom being responsible with finances delivers.
May is the month in which Neil finds out if the company he works for has met their corporate goals, and what, if anything, the resulting annual bonus will be. As is recommended by pretty much any financial planner, we built our budget around what *is* instead of what might happen, so we hadn’t planned on the bonus, and weren’t depending on receiving it.
Not only that, but because we’ve been careful with where our money goes and have a good grasp on the state of all our accounts, the bonus (when it did come this year–hooray!) didn’t just disappear into paying off some of the balance on a credit account. We know exactly where it went, and feel really good about it!
I’m going to do the numbers a bit differently this month. By outlining exactly what our combination of variable spending and debt repayment is, it’s pretty easy to extrapolate what Neil’s bonus was. The bonuses are tied to salary and performance; I know some of his colleagues read, and sharing that information breaks a few confidentiality requirements he has.
What I can tell you is that by being prepared and on plan with our spending/debt repayment, and having a savings account set up with some ideas of acquiring Big Red, we were able to act on a great deal that came up for a car and pay off a large chunk of that consumer debt, moving our Debt-Free date up to July 31, instead of Sept. 30.
Looking back over the previous months, it becomes pretty obvious that it’s not just “spending less than $X per month” that is key to fiscal solvency (I started off thinking it was just that, with the initial $1000/month goal).
It’s the consistent visibility into the amounts going in and out, knowing what expenses might be coming up, having an emergency account set up for the unexpected things that always manage to sneak in anyhow, and of course after all the necessities have been paid for, ensuring what’s going out is less than what’s coming in (which, of course, starts with keeping records that give one visibility into the amounts going in and out, and cue Elton John “it’s the ciiiiiiiiirrrrrrrcle of liiiiiiiiife…”).
So, at the end of this month we owe $4908 on our line of credit. It will be paid off in 2 months. We acquired a car, and we realized we have just enough in our savings account to pay our property tax bill in July. And it feels really, really good!
I sortof feel like a bit of a smug arse, posting about how awesome we feel we are (and perhaps like I’m inviting a bit of a reality-check karma smackdown). But then, we put a lot of effort into getting ourselves into a good financial place.
It’s funny, because as much as people seem loathe to be really honest about financial trouble, it’s pretty obvious that people are much more comfortable saying “man, I owe so much on my credit card” rather than celebrating being responsible and being out of debt.
So, in the comments, celebrate! Are you being uber-successful with your budget? Are you getting out of debt or there already? Share how you’re doing it and how good it feels.